Hillman v. Maretta

Date Filed:
June 3, 2013
Case #: 11-1221Sotomayor, J., delivered the opinion of the Court, in which Roberts, C. J., and Kennedy, Ginsburg, Breyer, and Kagan, JJ., joined, and in which Scalia, J., joined as to all but footnote 4. Thomas, J., and Alito, J., filed opinions concurring in the judgment.Full Text Opinion: http://www.supremecourt.gov/opinions/12pdf/11-1221_7l48.pdf

Preemption:
"The Federal Employees’ Group Life Insurance Act (FEGLIA), which establishes a life insurance program for federal employees, allows an employee to designate a beneficiary to receive the proceeds of the policy when the employee dies. FEGLIA preempts a Virginia law which provides that, when a married couple is divorced, the divorced spouses are no longer the beneficiaries of each other’s life insurance policies."

Decedent named his then-wife (Respondent) as beneficiary of his Federal Employees' Group Life Insurance (FEGLI). He later divorced and married Petitioner without changing the beneficiary designation. After decedent’s death, Respondent received the death benefits and Petitioner filed action claiming that Respondent was not entitled to the benefits due to state statute which provided that divorced spouses are no longer the beneficiaries of each other’s life insurance policies.

The lower court found Respondent liable to Petitioner for the FEGLIA benefits. On appeal, the court reversed and held that FEGLIA preempts the state statute because it conflicts with the purposes and objectives of congress. Petitioner appealed to the Supreme Court.

Petitioner argued that FEGLIA does not preempt state code because (1) Congressional intent of FEGLIA is to avoid administrative difficulties and delays; (2) Congress’s decision to exclude an anti-attachment provision in FEGLIA illustrates intent to allow state equitable remedies; and (3) the 1998 amendment to FEGLIA requiring proceeds to be paid in accordance with a properly filed divorce decree shows intent to not preempt state equitable remedies.

The Supreme Court affirmed and held that FEGLIA preempts Virginia law and allows an employee to designate a beneficiary of their choosing, despite state law providing that divorced spouses are no longer each other's beneficiaries of life insurance policies. The Court relied on their decision in Ridgway v. Ridgway, 454 U.S. 46 (1981) to conclude that Congress’ intent in passing the FEGLIA was that the insured should have an unrestricted and non-waivable right to name or change a beneficiary, and that the FEGLI benefits belonged to the named beneficiary.